Passionate about IP! Since June 2003 the IPKat has covered copyright, patent, trade mark, info-tech, privacy and confidentiality issues from a mainly UK and European perspective. The team is Neil J. Wilkof, Annsley Merelle Ward, Nicola Searle, Eleonora Rosati, and Merpel, with contributions from Mark Schweizer. Read, post comments and participate! E-mail the Kats here

The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

“One of the most controversial issues pending in
the EU copyright reform – with a directive proposed by the Commission on 14 September
last and currently being discussed in the European Parliament Committees –
concerns the panorama exception, also known as freedom of panorama.

In
addition to the discussion whether or not the exception should be harmonised further via
legislative proposals, the topic is also being subject to court rulings. Among
these we have to highlight the Swedish Patent and Market Court ruling
of 6 July 2017, in which that court decided in favour of Bildupphovsrätt in a
copyright dispute against Wikimedia Sweden concerning the communication to the
general public by the latter, via the internet, of copyright-protected artworks
permanently placed in or at a public place. Among other things, in excluding
the availability of the panorama exception to Wikimedia, the Swedish court
stressed that whether the communication took place for commercial purposes or
not was of no significance.

We find it
very important to present the Portuguese model for the panorama exception and
discuss its application in contexts covered by the adaptation right.
Furthermore, the discussion below offers an approach to the concept of public
places for the purpose of the panorama exception and its relevant implications, as
well the distinction between direct and indirect commercial purposes.

Portuguese
provision on panorama and the Berne’s three-step test

The
Portuguese provision at stake is Article 75.º, paragraph 2, point q) of the
Portuguese Code of Authors’ Rights and Neighbouring Rights (Código
do Direito de Autor e dos Direitos Conexos), created by the Decree-Law No.
63/85 of 14 March 1985 (as last amended by the Law No. 49/2015 of 5 June 2015).

This
provision contains a catalogue of the exceptions/limitations to authors’
exclusive rights (exceptions to economic rights, not also moral
rights), where its “closed” nature is the natural consequence of the structure of Article 5 of the InfoSoc Directive, as well as arguably the first step under Berne Convention three-step test.

The
wording of the provision states that, among the uses allowed, there is “the
use of works, such as, for instance, works of architecture or sculpture, made
to be located permanently in public places” (75.º, paragraph 2, point q)

75.º § 4
completes the three-step test by including the two additional steps and stating
that “the ways of exercising the uses foreseen in the preceding paragraphs shall not be contrary to the normal
exploitation of the work, nor cause an unjustified prejudice to the legitimate
interests of the author.”

75.º § 3
states that“The distribution of the
legally reproduced copies, to the
extent justified by the purpose of the act of reproduction, is also
legal.”

71.º adds
that: “The statutory right to use a work without the author’s previous
consent includes the statutory right to translate or otherwise transform, to the extent necessary to such use.”

As mentioned
above, the exception is only available in respect of economic rights, not also moral
rights. Article 76.º a) states that “The free uses mentioned in the preceding article
shall be accompanied by (...) the indication, wherever possible, of the name of
the author and of the publisher, the title of the work and other circumstances
that identify them”. Article 56º underlines that the author enjoys
the right to oppose all acts / uses / adaptations of the work that might
affect his honour and reputation.

The first
thing to underline is that, like all the other EU Member States, the list of
exceptions under Portuguese law is exhaustive.

Secondly, the
‘special cases’ covered by relevant exceptions must be also subject to a use
that: (a) is not contrary to the normal exploitation of the work; and (2) does not
cause an unjustified prejudice to the legitimate interests of the author.
Overall Portuguese copyright law uses very balanced and strict criteria to
allow the exceptions to authors´ rights.

Therefore the exceptions to authors’ rights (including the panorama one):

-are
only allowed in special cases (closed catalogue);

-must
not be contrary to the normal exploitation of the work;

-must
not cause an unjustified prejudice to the legitimate interests of the author;

-are
only allowed to the extent justified by the purpose of the exception at issue.

Commercial
(direct and indirect) uses not covered

Portuguese copyright law is such that commercial uses are not covered by the panorama
exception under Article 75.º § 2 q).

The
commercial use of works by for-profit undertakings would deprive authors
of potential commercial revenue arising from the exploitation of the various dissemination
channels, therefore damaging the normal exploitation of the work at issue and amounting
to an unjustified prejudice. Furthermore, a commercial use would exceed the
extent justified by the purpose of the exception.

Will Adriano's photographs be covered by the panorama exception?

The
adaptation right and panorama

The
above-mentioned conclusion can be also extended to the adaptation right
(Article 71.º), which already includes the condition of the extent justified by
the purpose of the exception. This is in line with Article 13 of the TRIPS Agreement. It
shall not be, however, seen as an argument the non-harmonisation of the
adaptation right within the scope of the InfoSoc Directive.

The
misleading discussion regarding the concept of public place

Some
intend to limit the scope of exclusive rights by trying to focus the
discussion on the Portuguese concept of ‘public places’, and arguing that it must be understood as a place that is publicly accessible, even if
the access to the public is implicit and/or an entrance fee is charged and/or
the right of admission is reserved.

The main
question is not “What is a public place?”. It is rather knowing if the work was
made to be located permanently in public places. The main question is,
therefore, to understand the intention of the author when he realised the work.

This leads
to the conclusion that a ‘public place’ for the purpose of the panorama
exception must be understood within the context in which it is included. We
have to understand the concept “made to be located permanently”. With this
expression the Legislator sent a clear message that a public place must be able
to receive the permanent location of a work, and that the intention of the
author, when creating the work, was to confer it a permanent location.

This is
the reason why the Legislator introduced, as the types of works included in the exception, “sculptures and works of architecture”.
Those two types of works are intrinsically linked to the concept of permanent location
nature, and thereby public places.

The
Portuguese exception is able to cover public interiors (for example a public
subway station), yet it will not able to cover works in museums if the works were not made to be located there permanently.Such
assumption is not based on the definition of public places, but rather on the
concept of permanence and will of permanence.”

Tuesday, 15 August 2017

Get ready for the second part of this Kitten’s report! The first part (online enforcement and black box tinkering), can be reviewed here.

Exhaustion of Copyright in Digital Objects

Prof. Dan L. Burk (University of California-Irvine School of Law) provided an overview of cases which addressed whether digital exhaustion applies to digital works protected by copyright exists under US and EU law. By this is meant whether the principle of exhaustion, whereby the rightsholder cannot hinder the further distribution after the first sale authorized by the IP owner of a work protected by copyright, applies as well to digital works.

Prof. Burk highlighted that this topic has taken on a polemical character due to the social expectation of purchasers being able to resale digital copies of works, lawfully acquired, which are protected by copyright.

From a US perspective, Prof. Burk started with the case, Capitol Records, LLC v. ReDigi Inc, 934 FSupp2d 640, which considered whether the first sale doctrine defense applies to the resale of a digital music file in the marketplace ReDigi. The Court ruled that the first sale doctrine defense did not apply in this case because it only covers material items; and ReDigi was “distributing reproductions of the copyrighted code embedded in new material objects”, rather than distributing any material object.

From a European perspective, Prof. Burkfirst highlighted the outcome of the case UsedSoft GmbH v Oracle International Corp. case, C-128/11, ECLI:EU:C:2012:407, which involved the resale of “used” licenses for the Oracle’s downloadable software in the market UsedSoft. The Court ruled that under the Software Directive, there is digital exhaustion when “the copyright holder … [in] authori[zing] … the downloading of that copy from the internet onto a data carrier, has also conferred … a right to use that copy for an unlimited period … in return for payment of a fee intended to enable the rightholder to obtain a remuneration corresponding to the economic value of that copy of this work...”. The Court also stated that the Software Directive is lex specialis in relation to the provisions of the InfoSoc Directive.

The second case discussed by Prof. Burk was Art & AllPosters International BV v Stichting Pictoright, C-419/13, ECLI:EU:C:2015:27, which involved the sale of canvas reproduced images protected by copyright, which were transferred from posters without consent from the IPR owners. The Court ruled that exhaustion under the InfoSoc Directive does not apply if “a reproduction of a protected work, after having been marketed in the European Union with the copyright holder’s consent, has undergone an alteration of its medium … and is placed on the market again in its new form”. The Court also stated that exhaustion applies to the tangible object containing the work.

Prof. Burk then discussed Vereniging Openbare Bibliotheken [VOB] v Stichting Leenrecht, C-174/15, ECLI:EU:C:2016:856, which involved whether public libraries are allowed to lend a digital copy of a book under the Rental and Lending Rights Directive. The Court ruled that the lending of a digital copy of a book is covered by the Rental and Lending Rights Directive when such copy is placed on the server of a public library. Only one copy may be downloaded during the period for which the copy is being loaned; the user is allowed to download it onto his computer only during such period and cannot use it after the period has expired. The Court also stated that public lending is “different in nature from a sale … since the lending right remains one of the prerogatives of the author notwithstanding the sale of the physical medium containing the work”.

Prof. Burk observed that the outcomes of these three cases might suggest that exhaustion applies in a different way, depending under which Directive the work is protected: if the work is protected under the Software Directive and requirements for exhaustion are fulfilled, digital exhaustion applies. If the work is protected under the InfoSoc Directive, exhaustion is linked to the sale of the physical object containing the work. Nevertheless, Prof. Burk remarked that the existence of digital exhaustion under the InfoSoc Directive still remains unresolved.

Copyright Protection and Fair Use:

The Evolution of Institutions Governing Music-file Sharing in 1997-2017 America

Dr. Kunbei Zhang (Chongqing Technology and Business University) and Prof. Aernout Schmidt (Leiden University) presented the outcomes of their research that focused on the USA, in which they analyzed how environmental factors (e.g., scientific, economic and social) have impacted on the legal system with respect to the fair use defense.

The methodology applied was the implementation of agent-based model simulations, which consist of “computational models for simulating the actions and interactions of autonomous agents with a view to assessing their effects on the system as a whole”.

A database of fair-use case law from 1990 to 2017 served as the foundation for postulating certain hypotheses, whereby these data are inputted into the model to perform simulations under different parameters and then to assess the results.

The parameters used consisted of four approaches and four categories. The approaches were scientific, considering innovation as the facilitator of infringing behavior; economic, considering the collapse of the traditional music industry and the rise of streaming services; social, considering sharing as both cooperation and theft; and legal, considering judicial decisions and rules governing copyright issues. Meanwhile, the categories focused on the reactions to the innovations and consisted of adopting, adapting, excluding and fighting as behaviors.

Simulations were performed from the vantage of three different moments in the history of music: the emergence of CD’s, music file-sharing, and streaming. Dr. Zhang and Prof. Schmidt then analyzed the results, concluding, inter alia, that legal scholars have overestimated the influence of the law on file-share users behavior.

In this regard, they highlighted that, before the Napster case, there was excitement about the advantages of file-sharing, but mass infringement of copyright then ensued. They observed that, on the basis of the results of the model simulations, changes made to at least some of the parameters involved would not have altered the ultimate result; e.g., the same outcome would have occurred even if the law in effect had been different.

Dr. Zhang and Prof. Schmidt also concluded that the legal system (with respect to the fair use defense) during the 1990-2017 period, both shapes and is being shaped by environmental factors, which are essentially dynamic. For this reason, it is necessary to take into account that the cycle times for these developments is not static. They also remarked that the results can be used as a baseline for a more empirically-based conversation about the formulation of legal policy.

Monday, 14 August 2017

The AmeriKat was used to a punishing schedule,but punishing IP damages in Italy?

Punitive damages. Those two words seldom roll off an IP litigator's lips. Our damages are primarily compensatory (although the CJEU in January's decision OTK v SFP (Case-367/15) has another view). However, those were the subject of a big decision from the Grand Chamber of the Italian Court of Cassation (Cass. Civ., SS.UU., 05.07.2017, No. 16601). Kat friend Roberto A Jacchia (De Berti Jacchia Franchini Folani) in Milan reports on the decision and what it means for Italian litigants and the interpretation of the IP Enforcement Directive.

"It is common ground that punitive damages – which are of American origin and exist in a number of common law legal systems – are awarded in civil lawsuits in addition to the damages actually suffered by the injured party (compensatory damages), in case of conduct characterized by malice or gross negligence. Their function is to punish the wrongdoer, as well as deter him, and society at large, from engaging in the wrongful conduct in the future. Whilst punitive damages were traditionally not admitted in Italy, where civil liability revolves around the notion of compensatory damages aimed at reinstating the victim’s position before the commission of the tort, the Supreme Court now affirmed the principle that punitive damages are per se not incompatible with the fundamentals of the system.

Cass. Civ., SS.UU., 05.07.2017, No. 16601 is a landmark judgment. It is the first time the Court of Cassation ruled in favour of the possibility to recognize and enforce, in Italy, foreign judgments awarding compensation in the form of punitive damages. By its decision, the Grand Chamber rejected a petition filed by the defendant in the previous instance before the Court of Appeal of Venice, thus upholding the recognition and enforceability of three Florida judgments awarding compensation for bodily injury caused by a motorbike accident occurred in the US and involving the Italian manufacturer of a crash helmet and its distributor, which were comprised of punitive damages.

The Court conducted a comprehensive case-law review, taking the lead from Cass. 1183/2007 and Cass. 1781/2012, outlining the traditional position of the mono-functional nature of civil liability which is aimed at the restoration of the patrimonial integrity of the injured party. The Grand Chamber considered this analysis outdated and worth revisiting. It recalled its own decision SS.UU. 9100/2015 in which the sanctioning (punishing) function of compensation was held to no longer be in absolute conflict with the general principles of the Italian legal system. The Grand Chamber thus held that, in addition to the predominant and primary compensatory function, the multi-functional nature of civil liability allows room for elements of both deterrence and punishment.

Corte Suprema di Cassazione (aka Italian Supreme Court)

The Court then supplied an extensive exemplification of instances of so-called ultra-compensatory damages already present in domestic statutory provisions, with deterring and/or sanctioning functions in relation to the seriousness of the conduct or the extent of the harm caused.

In the field of intellectual property in particular, the Court mentioned Article 158 of the Copyright Act (Law 22 April 1941, no. 633) on the compensation for damages that can be claimed by a person injured by the unauthorized exploitation of an intellectual work, as well as the analogous Article 125 of the Code of Industrial Property (Legislative Decree 10 February 2005, no. 30) on the compensation for damages by way of disgorgement of the profits earned by the infringer, as allowed by Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights (Enforcement Directive).

The Grand Chamber’s reconstruction appears consistent with the recent case law of the Court of Justice on Article 13 of the Enforcement Directive. In particular, the Liffers judgment (17.03.2016, Case C-99/15) had highlighted that the damages awarded to the holder of an infringed IP right should take account of all appropriate aspects, including any moral prejudice suffered by him, thus, going beyond a strictly compensatory approach. Besides, in its judgment of 25.01.2017 (Case C-367/15, Stowarzyszenie Oławska Telewizja Kablowa), the Court of Justice ruled that a national provision whereby the holder of an infringed IP right may, without having to prove the actual loss or specific causal nexus, demand payment of a sum corresponding to twice the appropriate fee that would have been due if permission had been given by the right holder, was not precluded by EU law.

Turning to the Court of Cassation’s decision, significant references were made to certain relevant rulings of the Italian Constitutional Court: Corte Cost. 303/2011, which attributed an express sanctioning value to the determination of damages in some contexts of labour law; Corte Cost. 238/2014, which highlighted the multifunctional nature of civil liability, in response to the need for greater effectiveness; and Corte Cost. 152/2016, which emphasized the non-compensatory nature of the special liability for abuse of process under Article 96 of the Code of Civil Procedure. Thereafter, the reasoning of the Court focused on whether foreign judgments awarding punitive damages are compatible with Italian public order. Under Italian law (pursuant to Article 64 of Law no. 218/1995, the Private International Law Act), the Court of Appeal held that to grant the recognition and enforceability of a foreign judgment it must verify its compatibility with public order, traditionally defined as the set of fundamental principles characterizing the ethical and social structure of the national community at a certain point in time. In this regard, the Grand Chamber dwelt on the profound evolution undergone by the notion of public order over the years. In doing so, it identified it with the broader concept of international public order, which is comprised of the recognition and protection of fundamental rights common to different legal systems, first and foremost at a supranational level.

Jumping over the hurdles of the principle of damages...

Thus, public order encompasses the architecture of fundamental rights which is shared by the international community, in particular at the European level (as mainly enshrined in the Charter of Fundamental Rights of the European Union). The Court furthermore specified that any foreign judgment “exporting” rights and obligations not governed by (and unknown to) the domestic legal system, even if not precluded by European law, must nonetheless comply with the Constitution and the primary legislation implementing the constitutional system. Ultimately, the foreign legal entity that “knocks at the door” of the Italian jurisdiction (in this case, punitive damages) may be held contrary to public order only if it is in total contradiction with the texture of values and legal rights that are relevant for the purposes of its recognition (which was held not to be the case with respect to punitive damages).

Having thus overcome the hurdles of the very nature of non-compensatory awards and of public order, the Court moved on to the conditions that non-compensatory damages must fulfill in order to be safely “imported” into our legal system. These are

the principle of legality, whereby a foreign award comprised of punitive elements must be based upon an identifiable source of statutory law;

the principle of typicality, which requires an accurate characterization of the instances in which punitive damages may be award;

the principle of predictability, requiring the specification of quantitative limits or criteria of the awardable compensation; and

the principle of proportionality between compensatory damages and punitive damages, as well as between punitive damages and wrongful conduct, in order to appropriately identify the breadth and borders of the sanctioning/punishing element.

To sum up, the ruling of the Grand Chamber marks a turning point in the evolution of the civil liability paradigm in Italy. However, this does not mean that the Italian Courts ruling on claims for non-contractual or contractual damages will be allowed to increase the compensation arrived at according to the ordinary rules by adding a punitive element in their discretion. This would be contrary to Article 23 of the Constitution which links the imposition of patrimonial obligations to a statutory enabling provision. All in all, the door to punitive damages is not wide open, but it is doubtless more than ajar for IP litigants."

Sunday, 13 August 2017

Let's
first take a look at coming-soon events. Organised under the
patronage of the Polish Patent Office, the CopyCamp
2017. The Internet of Copyrighted Things will take place on on
28-29 September at Kino Praha in Warsaw.
During the event, speakers from a variety of backgrounds will be
talking about how exclusive rights affect our lives. Presentations
will be preceded by workshops. Participation to the event is free,
registration is necessary and can be done here.

What
are trade secrets and how can they be used by innovators to safeguard
research and data? The Royal Society of Chemistry will host the
seminar Trade
secrets: are they more useful to innovators than patents?, which
will be held on 7 September at Hardwicke
Chambers in London, to answer all of these questions. Attendance to
the seminar is free, the names of the attendees should be
communicated through event page.

Kat's selfie, Caravaggio-style

On
to some flashy news, Kim Kardashian's company Kimsaprincess
Inc. was accused of patent infringement by the company Snap Light.
Snap Light, produces smartphone cases with
“integrated lighting accessory and case for a mobile phone device”, in short a flash to take better selfies. All the while, Miss
Kardashian has been endorsing the company LuMee which offers a
similar product. The sparkling stage of the socialite's endorsement
is hitting hard on the sales of Snap Light, who is asking for significant damages. Full article on the Daily Mail Online here.

Ploughshare
successes continue to support UK prosperity. Ploughshare
Innovations is the technology commercialisation arm of the Defence
Science and Technology Laboratory (Dstl) and, according to a report
recently publised, the company has created a great economic impact
generating jobs, increasing exports and by attracting investment,
supporting the UK’s prosperity.

Call
for papers!! In the context of
the XXth
International Congress 2018 International Academy of Comparative Law
to be held next July in Fukuoka, Japan, there is a call for papers on
the special session topic: sharing the economy and the law. Deadline
for abstracts submission is 30 March 2018. More information can be
found here.

Saturday, 12 August 2017

It has been a turbulent summerfor Roger Waters’ new album “Is this the life we really want?”, released around two months ago. In Italy, the sale of the album cover, the booklet and the CD sticker was prohibited by the Milan Court of first instance on 25 July last (the decision is not available on public databases yet, as soon as this Kat finds it, she will let you know).The reason? The cover art was found to amount to an infringement of copyright in a work of art called “Cancellatura” (1964), by Italian artist Emilio Isgrò.

Mr Isgrò is well known in his native Italy as well as around the globe for his erasure technique. The message he conveys through his artworks is literally hidden between the lines: he manually erases parts of the text with black ink, leaving only a few visible words. The resulting message is cryptic and evocative at the same time. These works of art have been exposed in museums and have been widely discussed by experts for half a century. The cover of Mr Waters' new album also uses the erasure technique, blacking out text with irregular lines and leaving out only the words forming the title of the album itself.

In the present case, the Milan Court of First Instance had to assess, first, whether Isgrò's work could be protected and, secondly, whether said work had been unlawfully reproduced in the album cover at stake. As regards the first point, the court had no problem in establishing the protectability of the artist and of his works of art, which have been exposed and studied throughout the years and whose artistic value is persistent and undiminished.

As regards the second point, the court introduced the discussion by saying that it is the expression what is protected, not the idea behind it. In this case, it is clear in the blink of an eye that the expressiveness in two works of art is the same. The use of black irregular lines, traced in an irregular manner only leaving some of the words are unmistakable. The court added that the use of the same expressive forms is also strenghtened by the common perception of music and art critics. For these reasons, the court issued the injunction banning the sale of everything but the plain CD, basically. With a hefty fine attached (€100 for each new infringement following the injunction), walling off the Italian market to the former Pink Floyd bassist (wink wink).

William Xerra's "Vive"

The court’s analysis was nonetheless criticised by some, who inferred that not even Isgrò's work was original because it was inspired by and a continuation of the earlier works by Man Rey (artist William Xerra famously said Rey “lives” on in Isgrò). This Kat, though, tends to agree with the court. If we compare first Rey’s and Isgrò’s works, we notice that there is a similarity in the idea, the expression of it is completely different. One erases every word in the text while the other leaves out some words, to compose thoughts and sentences which express something else than deleting. If we confront, in turn, Waters’ album cover with Isgrò’s “Cancellatura”, the expressivity which emerges is the same. There was no effort to contextualise, parody or reference Isgrò’s work. Although the erasure technique has been used in art and in other fields, the use done by Mr. Isgrò is different and stands out, while the album cover does not. It’s just a watered down version.

Friday, 11 August 2017

For as long as there have been movies, the industry has been characterized by the interaction between contents and distribution. Without good content, distribution becomes an empty exercise; without effective distribution, movies languish without a suitable audience. Against this backdrop, there is no company with a better reputation for disrupting the current modes of content creation and distribution than Netflix. First came its success in upending the movie rental business and later we witnessed its transition into remaking the digital content distribution business (and, more and more, context creation). Netflix has become a synonym for the way that innovation should be done.

Consider the following: In the recently-ended second quarter, as reported, Netflix had 104 million subscribers. It added 5.4 million of them during that quarter alone, 4.14 million coming from outside of the US. It plans to spend over $6 billion dollars in programming, including a sizeable chunk in developing new shows. Indeed, in the second quarter, Netflix released more than 50 new programs. That has made Netflix the apple of every Hollywood studio’s eye.

Still, not is all sunshine at Netflix. Two recent news items suggest that there may be some rain clouds on Netflix’s horizon. The first is the report, published (see Reuters.com here) earlier this week, that Disney plans to roll out two streaming services. The first will rest on sports programming from its ESPN channels. No real surprise here. While ESPN has over the years been the most consistent source of revenue for Disney, the trend is towards “cord-cutting”, as more and more people cancel their cable subscription service. Finding a streaming alternative is an obvious attempt to address this problem. A challenge for Disney, but not a major threat to Netflix.

It is the second planned streaming service, which will revolve around providing Disney and Pixar movie and television programming, that is of greater concern, since it will mean that Netflix will lose access to new movie fare from Disney and Pixar. For example, Netflix has rights to certain new Disney movies, such as Toy Story 4 and a live-action version of The Lion King. (As Reuters.com reminds us, children are great fans of streaming, and no one connects with children better than Disney). It is reported that Disney will take back these rights from Netflix. Beyond the potential loss of desirable Disney contents is the challenge that may be posed by Disney establishing a competing streaming platform. As observed on Reuters.com, “…Disney is a media superpower, and its decision to aggressively pursue streaming could speed the entertainment industry’s adoption of the platform.”

And behind all of this lies the “A” word. Disney may be a media superstar, but Amazon is a business superstar—period. Amazon already has its hands in both the content and distribution sides of the business. What happens if Amazon too decides to provide a full-fledged streaming cum
contents platform. Disney today, maybe Amazon tomorrow: these prospects cannot be pleasant thoughts for Netflix.

But the greater problem for Netflix may not be the likes of a competing Disney platform; after all, Netflix offers plenty of contents other than Disney-related contents. Rather, the long-term challenge to Netflix may lie in its very business model. This is the view expressed by Porter Bibb, an iconic media figure both in the content and investment sides of the media and entertainment business. (We have the movie of the 1969 Woodstock Festival in large part due to him.) In a radio interview this week on Bloomberg (here), Bibb argued that the Netflix business model is “not sustainable”.

He reasons that the company has $20 billion in obligations, an amount that cannot be supported by a subscriber base, no matter how large. This means that Netflix will need to introduce advertising. The problem is that advertising will drive away a certain number of subscribers, which will then depress advertising rates, and so on, in a downward spiral. In his view, the upshot is that Netflix will reach a financial wall, within 3-5 years, leading to a severe drop in its stock price. After this happens, one of the big players, such as a Google or Apple, will swoop down to purchase Netflix and seek a way to fold it into its business.

If Bibb is correct, the fate of Netflix will ultimately be like so many other industry disrupters. In a world that is witnessing more and more industrial concentration, the ultimate impact of even the most successful innovators, such as Netflix, is not to create a new industry, but to help an existing behemoth add to the scope of its functionality and customer base.

Photo on upper right by Bidgee and is licensed under the Creative Commons Attribution 3.0 Unported license

Photo on lower left by Mark Goff, who has released it into the public domain

Over time, “communication to the public” seems to have become an increasingly complex, yet not clearly defined concept. What a delight then to read a road map! Thanks to IPKat Eleonora Rosati for bringing the simplified chart presenting the concept based on the most recent decisions of the CJEU. More IP materials can be found via Eleonora’s IP website here.

Sometimes marketing/trade mark strategy can be hard to comprehend ... News said that Coca-Cola is about to launch in the US a successor to Coca-Cola Zero under the name Coca-Cola Zero Sugar, which baffled IPKat Neil Wilkof, the Coke fan.

Via Katfriend Darren Meale comes the news that, together with Royal Bank of Scotland’s IP Legal Counsel Mark Cruickshank, he is organising a roundtable on Brexit specifically focused on brand owners in the financial services industry.

Former Intern Kat Eleanor Wilson attended the CREATe's inaugural seminar on the issue of openness in science, culture, and everything between. The relevancy of the topics considered warrant publishing Eleanor's summary of the event.

On July 27, Germany's Federal Court of Justice (Bundesgerichtshof - BGH) referred a new copyright case to the Court of Justice of the European Union: I ZR 228/15 - Reformistischer Aufbruch – see the report brought by IPKat Eleonora Rosati.

“An emerging theme in economics of innovation is the recognition that our standard definition of innovation is restrictive and generally ignores innovation occurring outside the boundaries of businesses.” – IPKat Nicola Searle reviews G.M. Peter Swann’s book “Common Innovation: How We Create the Wealth of Nations”, in which the author seeks to further those arguments, by delving into common innovation, which he defines as “innovation carried out by ‘the common man and woman’ for their own benefit”.

At the end of June the EPO published a notice stating from 1 July 2017 plants and animals exclusively obtained by means of an essentially biological process will no longer be patentable. Gemma Barrett (Bristows) explains what this means.

The 10th Anniversary EIPTN Conference (sponsored by the European Union Intellectual Property Office and the European Patent Office) took place at the University of Lund in Sweden at the end of June. Dr Jane Denoncourt (Chair EIPTN, Conference Convenor and Senior Lecturer at Nottingham Law School) reports on the event.

Around the IP Blogs

InternKats Cecilia Sbrolli and Tian Lu surfed about the IP blogosphere and returned with some very interesting articles for readers’ digestion and rumination.

Photo courtesy of Wang Ti.

PREVIOUSLY ON NEVER TOO LATE

Never Too Late 157 [week ending Sunday 23 July] | Sky v SkyKick - no CJEU reference re removal of own name defence to EUTMs | An improved improver? UK Supreme Court moves towards a UK Doctrine of Equivalents in Lilly pemetrexed battle? | An improved Improver? Part 2 | It may be use, but is it trade mark use? | The protection of TV formats: an Italian mock trial | What can the possible implications of the CJEU Pirate Bay decision be? A new paper | In memoriam of Kenneth Jay Lane: "My designs are all original"; "original from someone" | French Commercial Tribunal : clarity in paternity is key

Never Too Late 156 [week ending Sunday 16 July] A film is a film is a film: at Cannes, it's not that simple | BGH grants compulsory license in preliminary proceedings | An improved Improver? UK Supreme Court moves towards a UK Doctrine of Equivalents in Lilly pemetrexed battle | The Smoking Gun - Is IP research the next tobacco scandal? | the special world of pesticide products, counterfeits and parallel imports | New CJEU reference ... asking whether InfoSoc Directive envisages digital exhaustion | Freedom of panorama in Italy: does it exist? | Can Crowdsourcing Solve the Orphan Works Problem? | the EU IPO Observatory study finds trade secrets rule the roost over patents in Europe | Mock (culinary) trial at INTA 2017 | Weetabix in New Zealand Customs dispute over local rival Weet-bix

Never Too Late 154 [week ending Sunday 2 July] I Book Review: Patent Drawing Rules I German Supreme Court holds that extra-territorial delivery can result in patent infringement I Canadian Supreme Court holds promise doctrine "unsound" in AstraZeneca v Apotex Nexium dispute I EU General Court finds bad faith in VENMO trade mark dispute I “Correction” of expiry dates for granted SPCs now finally possible in Italy...sometimes I Book Review: The Law of Trade Secret Litigation Under the Uniform Trade Secrets Act I Chanel victorious in California court battle against Amazon sellers of counterfeit goods I Simplifying Community Registered Design litigation in the UK - Spin Master v PMS I 77M v Ordnance Survey - access to justice for SMEs in IPEC I Canadian Supreme Court holds that Google can be ordered to de-index results globally I Life as an IP Lawyer: Copenhagen, Denmark I UK UPC ratification timetable to continue in September, while Prep Committee acknowledges German constitutional hold-up I Hendrix's portrait is original afterall say Paris Court of Appeal I Covfefe ... the trade mark?! I Injunction available after claimed licence fees paid - PPL v JJPB I Trademark application for the devil's horn withdrawn I Jo Johnson to continue as IP Minister I UPC Order on Privileges & Immunities placed before Parliament today I Celebrate 120 years of AIPPI in Sydney I Event invitation - The Pirate Bay communicates to the public: are there any more online infringement questions to be answered? I Re-using Amazon item numbers (ASINs) for similar goods can constitute trade mark infringement and passing off

Having been distracted from the world of IP by his daughter's recent wedding, there has been some delay in this GuestKat's posting of the third instalment of his commentary on Eli Lilly v Actavis UK, [2017] UKSC 48. This pause for reflection has provided the opportunity to catch up with the many comments that have been posted on this case. This Kat thanks those who have contributed to the debate on this blog.To conclude this series, we should note that the court also considered the question of direct infringement under French, Italian and Spanish law, concluding that direct infringement was established in those jurisdictions as well. The court's analysis of these aspects was quite brief, notwithstanding that it disagreed with some of the findings of the earlier courts.

For example, in relation to French law, the Supreme Court "with some diffidence" [whatever that might imply in this context] reached a different conclusion from the court at first instance on the matter of whether the patent in the case claimed a moyens particuliers or a moyens généraux (a particular or a general means for achieving an effect). In his judgment Arnold J. had regarded the claim as one which was “narrowly worded to cover specific means” (moyens particuliers).

The significance of this lies in the fact that in French law the "doctrine of equivalents" is only normally applicable to claims in the category of moyens généraux, claims which “in general terms claim the means that provide for a particular function”. Having decided that the patent came into this category, the Supreme Court was able to apply the doctrine to determine that Actavis's product amounted to a "combination of means with a different structure but achieving the same global function" such that it was "a priori equivalent and thus infringing".

Under Italian law, Arnold J had concluded that "the patent clearly demonstrated a conscious intention of the patentee to limit the claims to pemetrexed disodium” (rather like an application of the third Improver question), and that this was "amply confirmed by the prosecution history". Both these conclusions were rejected by the Supreme Court which again found infringement by application of the "doctrine of equivalents".

As regards Spanish law, there were some complexities in the analysis because of Actavis's attempt to introduce a new argument after publication of the court's preliminary judgment, but in essence the Supreme Court was of the view that it was common ground that the Spanish courts have followed the United Kingdom approach and would follow the Supreme Court in modifying the Improver questions as it had done in this case. So direct infringement was found for all three countries as well as the UK.

Actavis's cross appeal on indirect infringement was moot at this point but the court dealt with it for completeness, upholding the Court of Appeal’s determination that Actavis were liable for indirect infringement if they knew, or it was obvious in the circumstances, that the ultimate use of the product would involve dilution in saline. This meant that the product as administered would exist in dissociated form in an aqueous solution which would contain both potassium and sodium cations and chloride and pemetrexed anions.

This decision leaves this GuestKat with mixed feelings. While there may be disagreement about what affect the judgment will have, there is little doubt that it will be the subject of much further discussion, and relied upon as opening up new arguments and approaches to the assessment of patent infringement in the UK and beyond. One article giving an interesting and balanced reflection on the possible impact of the case, particularly from the point of view of patent attorneys doing their best to draft effective patents in the future, can be accessed here. Those looking for further enlightenment or having a desire to debate the issue of equivalents with Lord Neuberger himself, Lords Hoffmann and Sumption, and Judges Dr. Peter Meier-Beck from Germany and Rian Kalden from the Netherlands, should make sure to attend the Institute of Brand and Innovation Law (IBIL)'s debate "Equivalents: K = Na. Is the genie out of the bottle?" to be chaired by Professor Sir Robin Jacob on Wednesday 1 November 2017 at the UCL Cruciform building in Gower Street. This GuestKat will be there and looks forward to an interesting evening.

The CREATe blog reported
on the event Exploring
Copy Ethics with CopyrightUser.org, held at the Centre for
Interdisciplinary Research at Bielefeld University. A comparative
discussion about “The Ethics of Citation and Partial Copying” in
civil and common law jurisdictions was carried out followed by the
presentation of the educational video “The Adventure of the Girl
with the Light Blue Hair” featuring more than 80 instances
copyright infringements in just under 4 minutes.

Also on the 1709 Blog,
this week's Copykat,
talks about the Statue of Liberty stamp, Beyonce's copyright pickle
and unauthorised use of photographs. In Cabin
Fever: Is Reconstructing a Work to Preserve It Copyright
Infringement? the post explores this very interesting area of Art
Law, adding to the equation the fact that the work in question
was sold in its original state, the first copyright registration
refused and the author disowned the work.

Turning onto the trade
marks road, the Kluwer Trademark Blog covered slippery slope of
How
“unitary” is an EUTM? CJEU decides in the KERRYGOLD matter.
If a mark can peacefully coexist with a EUTM in one part of the EU
but it does not in another, can the principle of the unitary mark
allow for trade mark infringement?

Walking on, the company
CeramTec GmbH maybe looked at the world through rose-coloured
glasses. Its trade mark application for a colour was refused as Pink
not very unusual for implants, rules Swiss court. The colour was
considered not distinctive compared to the others typically used in
the industry and the applicant failed to prove acquired
distinctiveness in the national market. News also reported by the
Kluwer Trademark Blog.

Fluttering around
denominations of origin alley. IP tango reports on Peruvian
Pisco: Renowned reputation. The Peruvian alcoholic beverage
Pisco, already a denomination of origin, was granted reputable
character by the Peruvian Institute
for the Defense of Free Competition and the Protection of
Intellectual Property (INDECOPI).

What is the boundary between patent and
copyright protection? Kevin
Collins on Patent Law's Authorship Screen: in his forthcoming
publication on the University of Chicago Law Review, as reported by the Written Description Blog, the author
discusses this intriguing topic, arguing “authorship screen is
important to prevent patents as "backdoor copyrights" that
"override the competition/protection balance" of copyright
law”.

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